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Netflix shares jump after Bank of America gets more bullish: 'Still more upside for the new king of all media'

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Key Points
  • Bank of America Merrill Lynch raises its price target to $460 from $352 for Netflix shares, predicting the streaming video giant will reach 360 million subscribers by 2030.
  • The firm reiterates its buy rating for the stock, citing the strength of Netflix's original content library.
Reed Hastings, CEO, Netflix
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One Wall Street firm is getting more bullish on Netflix, even after the stock's stunning performance this year.

Bank of America Merrill Lynch raised its price target to $460 from $352 for Netflix shares, predicting the streaming video giant will reach 360 million subscribers by 2030. The company's stock closed at $399.39 on Tuesday.

The company's stock rose 2.6 percent in Wednesday trading.

"We think Netflix can become the dominant streaming player in virtually all markets given its content scale, despite varying levels of competition, regulation, and economic conditions in each market," analyst Nat Schindler said Wednesday in a note to clients entitled “Still more upside for the new king of all media.” "Netflix continues to benefit from strong execution and favorable secular trends as the transition to internet video accelerates globally, and strong demand for premium on-demand content continues."

Netflix is the second best-performing stock in the S&P 500 this year. Its shares are up 108 percent in 2018 through Tuesday versus the market's 2 percent return.

The analyst predicts the company's subscriber base can grow 8 percent annually through 2030 to 360 million members. Netflix revealed its current membership level was 125 million subscribers at the end of its first quarter.

“Netflix continues to build its original content library, which will be an important asset as more competitors bring direct-to-consumer offerings to market. A stronger original content library supports longer-term pricing power,” the analyst said.

Schindler also reiterated his buy rating for Netflix shares.